Administrative Law Judge

General Statement

Approved subcontractors on contracts awarded by MassDOT under G.L. c. 30 have the right under G.L. c. 30, s.39F to make a sworn demand for direct payment of the balance due under a subcontract. The demand may be made on MassDOT if the subcontractor has not received payment of the balance due under the subcontract from the general contractor within 70 days after substantial completion of subcontract work.

A subcontractor is defined to include a person contracting with a general contractor to furnish labor or to furnish both labor and materials, or a person supplying materials worth more than $5,000 pursuant to a contract with the general contractor.

General contractors may file a sworn reply to a sworn demand.

A direct payment may be adjusted in part or in its entirety by an amount retained by the awarding authority to complete unsatisfactory work, an amount specified in a court order, or amounts disputed or claimed due under the subcontract by the general contractor in a sworn reply.

Summary of Direct Payment Process

Name and address of subcontractor, name and address of general contractor, MassDOT contract number, location of project, amount of balance due under the subcontract, and a statement identifying whether demand is by a subcontractor or a material supplier.

Proof that the demand was delivered by hand or by certified mail to the general contractor when delivered to MassDOT.

A sworn statement by the authorized signer that the demand was made "under pains and penalties of perjury." The sworn demand must also be notarized.

A statement of the status of completion of the subcontract work.

A detailed breakdown of the balance due under the subcontract.

Formal Requirements of Section 39F

Filing by Hand or Certified Mail

Section 39F requires that a sworn demand and sworn reply be filed at MassDOT by certified mail with a copy mailed to the general contractor at the same time. Filing may also be made by hand delivery with a copy delivered to the general contractor at the same time.

Sworn Statement

Section 39F requires that direct payment demands "shall be made by a sworn statement." The demand should include an explicit statement that the person signing it has made the statements contained within the demand "under the pains and penalties of perjury." The sworn demand must also be notarized.

Statement That Subcontract Work Is Substantially Complete

Section 39F permits a subcontractor on a contract awarded under G.L. c.30 to make a direct payment demand if the subcontractor has not received payment of the balance due under the subcontract from the general contractor within 70 days after substantial completion of subcontract work. The demand is subject to adjustment by the awarding authority for the estimated cost of completing "incomplete or unsatisfactory items of work." The sworn demand must contain a "statement of the status of completion of the subcontract work.

Detailed Breakdown of the Balance Due Under the Subcontract

Section 39F requires that both a subcontractor sworn demand and a general contractor sworn reply "contain a detailed breakdown of the balance due under the subcontract." The detailed breakdown of a subcontractor's demand must be sufficiently detailed under the circumstances of the subcontract that a general contractor's sworn reply may identify with specificity the disputed amount.

A "detailed breakdown of the balance due under the subcontract" should set forth the original value of the subcontract, all MassDOT-approved additions to the subcontract work through amendments to the general contractor, all pending but not-yet-approved amendments for subcontract work, all payments made by the general contractor for approved subcontract work done, all retainage taken or held, all credits, deletions, back charges or other material financial facts. The detailed breakdown should be self-explanatory and demonstrate through appropriate line items how the stated "balance due under the subcontract" was derived.